Personal Trade Reviews

Personal Trade Reviews

Citigroup Global Markets Inc. was recently censured and fined $350,000.00 ([PDF] FINRA Case #2019064316401) for failing to have a supervisory system to ensure statements were reviewed timely, as well as not ensuring they were receiving paper statements for accounts at custodians for which they did not have a direct feed. Although this particular incident was a BD fine, this information should be helpful for RIAs as well. An RIA should be conducting personal trade reviews as a part of their Code of Ethics. Considerations The review and supervision of outside brokerage accounts isn’t news; however, it’s important to take a Read more about Personal Trade Reviews[…]

Form CRS Updates in 2020 (Part 2)

Investment Advisers Act: Know the Rules or Pay the Price

Knowing firm requirements as set forth in the Investment Advisers Act is essential, and learning from the mistakes of others in this area can be a valuable and motivating tool for striving for compliance in the financial services industry. In an atmosphere where Chief Compliance Officers (CCO) are being added to disciplinary proceedings, learning and taking immediate corrective action is the name of the game. No longer is the firm the only name blasted across SEC complaints; regulators will ensure that individuals are equally held responsible. Read More…

Best Execution

Best Execution Violation Takeaways

Disciplinary actions are often the best way to answer questions such as “how did this happen” or “what can we do differently”. Recently, a member firm named Robinhood Financial LLC was fined $1.25 million for best execution violations. Their shortcomings can provide valuable takeaways to assist other firms in building and solidifying their compliance program.

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Footnote 74

Disciplinary Actions by FINRA: April 2020

FINRA publishes a monthly review of disciplinary actions taken against both firms and individuals. These disciplinary actions are useful tools to look for trends in violations and other sanctions. These trends can assist you in identifying weak areas in your firm’s compliance programs or surveillance. Below is a list of a few key actions from last month.

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FINRA Disciplinary Actions

FINRA Disciplinary Actions from January 2020

The Monthly Disciplinary and Other FINRA Actions report from January may provide a glimpse into the conduct by Firms and individuals that result in disciplinary proceedings. For Firms, a failure to evolve a program can be costly. For individuals, failure to disclose despite Firm-acknowledged requests may result in FINRA sanctions.

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Recent Enforcement Actions from FINRA

As summarized below, FINRA recently announced some recent enforcement actions against member firms that we wanted to share with you.  We have selected these specific cases to share as we feel these are very important areas of compliance within a broker-dealer.  More importantly, each of the examples summarized below were easily preventable.  Firms must ensure that its personnel receive adequate training and have the requisite experience when assigned supervisory responsibilities, and also have an obligation to ensure its policies and procedures are being followed. Read More…